Article discreditng the thesis that Mao "killed millions of people" in The Great Leap

[FireIceTalon]

In addition to this just being an assertion, it is also a strawman. I make no argument about who has understood or misunderstood the labour theory of value, but about the validity of the theory itself.

Not a strawman. Understanding competently the theory has a direct relationship to being able to conclude whether or not the theory is valid - an understanding which you, and most bourgeois economists in general, seem to lack.

There does not seem to be any useful shadow of an economic argument there. Was there some argument in particular contained therein that is of use?

There is all kinds of solid economic arguments made throughout in it. For instance:

In contrast, the whole marginal utility approach is based upon a microeconomic perspective, and has little, if anything to do with the macroeconomic level of things. It is essentially a one-sided, undialectical, reductionist approach to capitalist economy. While Marxism fully understands the dialectical unity of different levels of the capitalist economy, bourgeois economics maintain a massive Chinese wall between the micro and macro. Chris Giles, a columnist for the Financial Times, revealed the bankruptcy of bourgeois economics when he wrote recently, “Economists live in secluded silos. Absorbed in abstract thought, those at the academic frontier rarely have much useful to impart to those grubbing around real policy issues. The pond life in the microeconomic policy puddle too seldom talks to those in the macro pool -- and vice versa.”27

This reflects their whole narrow abstract outlook and false method. They are incapable of understanding capitalism as a whole, in its real development and contradictions, as this is not their intention. The marginal school is maintained solely in order to prove and promote the subjective view, namely that of the atomised individual. Their view is based upon a false abstraction in an attempt to mystify the real relationships -- class relationships -- under capitalism. We are led to believe that we are all individuals, with our individual preference, irrespective of our class or income. The idea was represented by Thatcher when she said there was no such thing as society. But as soon as we think in terms of society as a whole, the labour theory of value becomes self-evident. The total number of hours worked by society is the ultimate factor of production, which is then divided amongst the needs of society. This is the central feature.

“The peculiar fetishism of the Austrian School,” explained Bukharin, “which provides its adherents with individualistic blinders and thus shuts off from their view the dialectical relation between phenomena -- the social threads passing from individual to individual and alone constituting man a ‘social animal’ -- this fetishism precludes any possibility of their understanding the structure of modern society.”

If one's theory of value is incapable of describing the value of scarce products (unless "scarce based products" means something else?)

Indeed, 'scarce based products' does mean something else, although it was Ricardo rather than Marx who first explained this. You fail to understand that price (which is subjective) has little or no relationship to value (which is objective). Value is created in the realm of production, not in the realm of exchange. Also from the article:

The classical economist, David Ricardo, explained this point very well. “There are some commodities,” he wrote, “the value of which is determined by their scarcity alone. No labour can increase the quantity of such goods, and therefore their value cannot be lowered by an increased supply. Some rare statues and pictures, scarce books and coins, wines of a peculiar quality, which can be made only from grapes grown on a particular soil, of which there is a very limited quality, are all of this description. Their value is wholly independent of the quantity of labour originally necessary to produce them, and varies with the varying wealth and inclinations of those who are desirous to possess them.”

Ricardo then goes on to explain that “these commodities, however, form a very small part of the mass of commodities daily exchanged in the market. By far the greatest part of those goods which are the objects of desire, are procured by labour; and they may be multiplied, not in one country alone, but in many, almost without any assignable limit, if we are disposed to bestow the labour necessary to obtain them.”

“In speaking then of commodities, of their exchangeable value, and of the laws which regulate their relative prices, we mean always such commodities only as can be increased in quantity by the exertion of human industry, and on the production of which competition operates without restraint.” 17

Objects, which are not products of human labour, and do not have value, can certainly have a price when offered for sale. Through their price they take on a “commodity form”. As Marx explained, “things which in and for themselves are not commodities, things such as conscience, honour, etc., can be offered for sale by their holders, and thus acquire the form of commodities through their price. Hence a thing can, formally speaking, have a price without having a value. The expression of price is in this case imaginary, like certain quantities in mathematics.” 18 He goes on to give the example of the price of uncultivated land, which is without value because no human labour has been spent in its production. Nevertheless, given an attractive location, it can attract a hefty price.

Society however cannot live off honour, works of art or priceless artefacts, no matter what their price. Human beings can only live by the production of real wealth. Labour transforms nature and forms the basis for the production and reproduction of life. As Marx explained, it is socially necessary labour time, expressed in value, which lies at the centre of things. Monopoly prices are a product of definite circumstances, and do not reflect value as such. Despite our critics, the law of value, remains the key regulator of the capitalist economic life.

because everything we care about is scarce.

False. You are conflating actual scarcity with artificial scarcity. Production under capitalism (along with laws that protect private property) is structured in such a way that it is in the direction of profit and not use-value, so it deliberately creates scarcity in many places where there would otherwise be none. There are plenty of observable examples of this.

Nothing can be reproduced "without limitations or restrictions," and if the labour theory explains only those things that can be, then it explains nothing.

Not only is this a rigid assertion, it is also a propositional fallacy.

Economics is the study of scarcity.

In the context of bourgeois vulgar economics, this could very well be the case, and the study of economics in that realm as being the study of "scarcity" seems indicative to how they approach it. Too bad it is a myopic framework, placed upside down on its head, that completely ignores historical and social forces and political factors that CANNOT be separated from the realm of economics. This of course, is done on purpose, and you know very well why.

http://www.worldsocialism.org/spgb/socia...-economics

Marx made a distinction between such men as Petty, Smith and Ricardo and their successors. He wrote of the former that they devoted their efforts 'to the study of the real interrelations of bourgeois production', while the latter were 'content to elucidate the semblance of the interrelations' and to act in effect as apologists for the capitalist class. He called them 'vulgar economists'.

Engels had already warned, and shown great foresight, in 1843 when he wrote in his Outlines of a Critique of Political Economy: 'The nearer to our time the economists whom we have to judge, the more severe must our judgment become. For while Smith and Malthus found only scattered fragments, the modern economists had the whole system complete before them: the consequences had all been drawn; the contradictions came clearly enough to light, yet they did not come to examine the premises and still accepted the responsibility for the whole system. The nearer the economists come to the present time, the further they depart from honesty'.

That last part has particularly proven true, even and especially today, to the point where even bourgeois economists are admitting having difficulty in propping up their theories without them having look like propaganda for capitalism rather than being scientific theories that seek to actually provide any insight has to how things actually work or make empirical obervations and predictions.

If the theory claims that there is an abstract thing called value, imbued on objects by labour alone, which may or may not have anything to do with either use-values or exchange-values (prices), then this is an ethical stance, not a scientific theory.

Again, value is objective, and is created in the realm of production - not in the realm of exchange. So no, the LTV is not an ethical stance (one could try and justify it through an ethical context by saying something like "extracting surplus value from workers is morally wrong because its theft", but that isn't the basis for the LTV or for Marxist theory in general - class interests are objective - any ethical or moral implications that result from them are an afterthought and not used as the basis for understanding political economy).

It does not describe observable things, and does not offer any empirical predictions.

Actually it is your theory, of marginal utility, that suffers this problem - not the LTV.

You will notice that more often than not the supporters of marginal utility prefer to give “examples” about water and diamonds, rather than ordinary mass-produced commodities, that can be reproduced at will. They fail to explain, for instance, why the price of bread in the shops is the same for the hungry unemployed person as it is for the millionaire tycoon, despite the fact that the marginal utility of an additional unit is a thousand times more for the former than the latter. This is conveniently swept under the carpet by these theorists.

For the Marginalists, we are all simply individual “consumers” with so much money (“effective demand”) with which to make individual choices. The fact that under capitalism, we are faced with massive levels of inequality, generated by the workings of the market economy, is completely ignored. The fact that the working class is incapable of buying back the full value of its labour never enters the Marginalists’ head. Such contradictions are of no concern to them and their mechanical view of economics. Nevertheless, their abstract examples are the theoretical bedrock of marginal utility theory, and the rotten floor on which modern bourgeois economics stand.

The whole Marginalist theory is rooted in the concept of individual consumer preferences, namely that our value judgements about our purchases are the basis of the value of commodities. In fact, our value judgements do not decide the exchange-value of commodities. While these expressions use the same word (“value”), they have very different meanings, based upon a whole different outlook.

In reality, the marginal utility school is the subjectivist land of Robinson Crusoe, or the “isolated man”, to use the words of Böhm-Bawerk. Economics, based upon a subjective preference theory, is reduced to individual tastes and individual choices, which serve to maximise a thing’s utility. This approach is completely abstract without any notion of real society. Market relations are simply individual relations between a person and a commodity. For the Marginalist, it is individual behaviour that is the key to understanding the capitalist economy. Using this reductionist approach, they want us to artificially strip away all the social and historical vestiges of capitalism, including existing class relationships, in order to reduce everything to this simple model of individual behaviour. The whole concept is a false abstraction. It has no historical content. As a society, we do not live as individuals in isolation on a desert island, like individual atoms. Our natural desires/choice preferences are not inborn, or subject to “free” choice, but are a product of society and our place within it. It is not simply a question of individuals confronted with choices in a supermarket, irrespective of time and place. How does the subjectivist island of the Marginalists translate into the realities of everyday capitalist relations? They do not. That is why, in their myopic world, they have no explanation of capitalist crisis.

Marginal utility is in short, idealist nonsense, constructed and operating only in the realm of microeconomics, that bears no relationship to capitalist reality.